20160104-中国银河国际证券-China_Cement_Weekly_Q4_2015_Results_Likely_to_Remain_Unexciting__Waiting_for_Demand_Improvement_Post-CNY_12页_1mb

China Cement Sector Summary

Core Content Overview

The document provides an analysis of the Chinese cement sector, focusing on the fourth quarter of 2015 and the broader market dynamics. It outlines the trends in cement prices, demand, and company performance, along with valuation metrics and market share data.

Key Trends and Information

Cement Price Trends

• Cement prices declined throughout Q4 2015, with a nationwide average price of RMB247.42/tonne, down 0.7% week-on-week and 20.4% YoY.
• Prices in Guangdong, Anhui, and Jiangxi fell by RMB5–20/tonne after a brief stabilization since December.
• Future price increases may occur once construction resumes after the Spring Festival (CNY).
• Average inventory level rose slightly to 75.61% nationally, indicating weak demand and potential price pressure.

Coal Prices

• Coal prices stabilized in December but dropped 29.1% YoY to RMB372/tonne for Bohai-Rim Steam Coal (Q5500K).
• This decline may impact the cost structure of cement producers.

Q4 2015 Performance Outlook

• Q4 2015 results are expected to remain unexciting, as demand improvement is delayed.
• Price and demand rebound are anticipated after the Spring Festival.
• Earnings for most players in Q4 are unlikely to significantly improve over Q3 due to continued weak demand and high inventory levels.

Stock Performance and Valuation

Stock Performance (2015)

• Cement stocks experienced a deep plunge over the past year.
• Shanshui Cement [691.HK] saw a 69.1% increase in the first few months before being suspended due to insufficient free float.
• BBMG [2009.HK] was the best performer, rising 3.9% in December, but still down 18.8% for the year.
• CR Cement [1313.HK] was the weakest performer, down 52.6% in 2015.
• CNBM [3323.HK] declined 10.6% in the past month and 50.7% last year.

Valuation Metrics

EPS Growth and PEG

Peer Comparison

Regional Cement Market Share (2014)

East China

South Central China

North China

Northeast China

Southwest China

Northwest China

Grand Total

Main Points

• Cement prices have been declining throughout Q4 2015, with weak demand and high inventory levels.
• The market anticipates a potential rebound in prices and demand after the Spring Festival.
• Shanshui Cement was the only stock to show significant growth in early 2015 before suspension.
• BBMG and Anhui Conch are the top performers in terms of stock ratings and market cap.
• CNBM and CR Cement are among the weakest performers.
• Valuation metrics show a mixed picture, with some companies trading at higher multiples than others.
• Market share varies significantly across regions, with Anhui Conch and BBMG having the largest regional exposure in several provinces.

Key Information

• The document highlights weak demand and inventory pressure in the cement sector during Q4 2015.
• Policy stimulus may take time to affect the market, as many new projects are delayed until after the Lunar New Year.
• Valuation tables and peer comparisons provide insights into the financial health and performance of major cement companies.
• Market share data underscores the dominance of certain companies in specific regions.